Rajendra Gadhia vs. The Income Tax Officer

Parties Involved

Facts Summary

The assessee, Rajendra Gadhia, an NRI settled in the USA, filed his return of income for the assessment year 2017-18, declaring a total income of Rs.27,270/-. During the demonetization period, he made cash deposits of Rs.6,00,000/- each in his ICICI Bank account on 2nd and 3rd December 2016, totaling Rs.12,00,000/-. The Assessing Officer questioned the source of these cash deposits. The assessee explained that the funds were accumulated from cash withdrawals from his bank accounts with ICICI Bank and State Bank of India (SBI) over the years and from the money left over from USD withdrawals made from his Bank of America (BOA) account during his visits to India between 2012 and 2015. The assessee also submitted that the cash corpus was given to family members for social and medical purposes, and that his brother, Shri Mahesh Gadhia, acted as the custodian of these funds. The Assessing Officer added Rs.12,000,000/- as unexplained income under Section 69A of the Income Tax Act, 1961, and initiated penalty proceedings under Section 271AAC of the Act.…

Legal Issues

• 1. Whether the addition of Rs.12,00,000/- made by the Assessing Officer under Section 69A of the Income Tax Act, 1961, is justified.
• 2. Whether the penalty under Section 271AAC of the Act and the interest under Sections 234A, 234B, and 234C of the Act are justified.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

Similar Judgements

• Mr. Gulab Singh vs. The ITO

  Chandigarh bench

• Arvind Jivraj Shah vs. ITO, Ward-1(2)

  Pune bench

• Dhirain Mahesh Sadhwani vs. Income Tax Officer

  Mumbai bench

• Gautambhai Nansinh Chauhan Vs. ITO, Ward-1(3)(1) Petlad

  Ahmedabad bench

• Jagdish Naraindas Chandan vs. ITO 24(2)(1), Mumbai

  Mumbai bench

• Bhai Bhai Co vs. ITO, Ward 1(2), Siliguri